Panic at Water Ministry as Shell, Total stops fuel supply to non-paying gov’t MDAs

For a very long time, most government ministries, departments and agencies (MDAs) have been having an understanding with old major fuel dealers in Uganda—TotalEnergies Marketing Limited (formerly Total Uganda) and Shell.

Under this arrangement, the two fuel dealers have been supplying fuel to most government departments and sometimes on credit.

They are billed and pay later, monthly, quarterly or annually depending.

Apart from fuel, some also benefit from periodic car service, gas, lubricants, and other services.

However, some government departments are about to be cut off if not from this arrangement as fuel giants move to minimize risks.

This publication has now learnt that TotalEnergies demand Shs12bn and Shell Shs6bn in fuel from government departments respectively.

These fuel suppliers are now reportedly reluctant to supply fuel to some government departments because of outstanding dues.

They have sent several reminders to the entities in question but in vain.

The excuse has always reportedly been ‘no money, the government is broke, wait’.

“Some [government departments] have been cut off and others the process and negotiations are ongoing,” a source whispered to this publication.

Some of the government departments who are often in the habit of not clearing fuel dealers in time according to sources include the Ministry of Water and Environment, Ministry of Trade, UETCL, UEGCL, KCCA and among others. Full list will be in our subsequent publication.

We are told some of the affected government departments instead of clearing their debts have run to Stabex International Limited Uganda which is reportedly promising them ‘friendly’ arrangements.

Stabex is becoming a force to reckon with in the energy sector. The Gas and Fuel dealer has been on a major expansion drive across the country. They are launching new fuel stations almost every week in the country. This has sent panic among two big boys Shell and Total.

The Ministry of finance has always warned against the accumulation of domestic arrears.

“All accounting officers must prioritize payment of service providers on time and clearance of domestic arrears to avoid further accumulation of arrears and penalties. Accounting officers who continue to delay clearance of domestic arrears will be held personally accountable,” said PSST Ramathan Ggoobi.

The arrears arise from supplies of goods and services to the government and do accumulate when the period under which they were budgeted for, passes without them being cleared.